A simple guide to the basic facts
The new funding scheme in England is a subject that a lot of childminders and other early years providers are concerned about. While no-one has to offer funded places to families, the extended rollout means that it may become more difficult not to do so. The following information will hopefully answer most of your questions.
When is the new funding scheme coming into force?
April 2024, all working parents of 2-year-olds can access 15 hours per week
- September 2024, all working parents of children aged 9 months up to 3-years-old can access 15 hours per week
- September 2025, all working parents of children aged 9 months up to 3-years-old can access 30 hours free childcare per week
How do I get paid?
You will be paid the funding from your council. If you are not already registered you will have to contact your local early years team and ask how to register.
Some councils pay termly, or half termly. Other councils pay monthly.
What grading do I need to be able to offer funded places?
Some councils may require you to have a good or outstanding grade to be able to offer funding. Current Government guidance for councils is that funding should ideally only be offered by good or outstanding providers but if there is a lack of space providers graded required improvement can offer funded places. If a provider is downgraded it is up to the local authority to decide what to do.
How much will I receive?
Funding rates will vary depending on which council you receive your funding from. The rates published and advertised by the Government are what the government pay your council. They are NOT what you will receive (sadly!) The Government openly publish information about what they pay each council which may give you a very rough idea but please bear in mind that councils only have to pay providers 95% of the funding on average. This means that if your council has different supplements, (for example a supplement so that providers in deprived areas receive more funding) which you do not receive then you may not receive 95% of the published rates.
The Government figures can be difficult to interpret to the Early Years Alliance have helpfully compiled much easier to understand lists:
The official Government published information:
2023/2023 Funding for three and four years olds. Information from the Early Years Alliance:
Funding Rates for two-year olds from April 2024. Information from the Early Years Alliance:
Funding rates for children under two-years old. Information from the Early Years Alliance:
DON’T FORGET: THIS IS NOT WHAT YOU WILL RECEIVE. YOU WILL PROBABLY GET LESS THAN THESE FIGURES.
What can I do if the funding does not cover my hourly rates?
This is a tricky questions as different councils may have different rules so you must check your funding contract carefully or you could be in trouble and have to pay money back if you get audited. However more and more parents seem to understand that the funding providers are paid does not cover costs and may be very happy to pay a voluntary sustainability fee. Do not charge this per hour as if you are audited it can look too much like a ‘top up fee’ which is not allowed.
You can also still charge what you like for any hours parents use outside the funded hours. Don’t forget the funding DOES NOT cover all 52 weeks of the year. You are also allowed to charge extra for things like food extra classes or trips (such as a visit to a farm) and consumables such as nappies and sun-cream. However parents must be given the option to provide these themselves if they prefer.
*rules do vary between councils so please check your council funding contract.
What sorts of hours does funding cover?
Parents can claim for up to 38 weeks a year, For families claiming 30 hours a week this equals 1,140 hours a year. You can offer funded places on a term time only basis of 30 hours a week or stretch the funding over a longer period. Here is one example of how you might do that:
52 weeks in a year minus 4 weeks annual leave for the childminder = 48 weeks.
1140 hours divided by 48 = 23.75 hours
This means parents could have 23 hours 45mins funding per week over 48 weeks. You can then charge you normal rate for any hours over these hours.
If I offer term time only funded places do my terms have to match up with the local authority?
It may be easier to do this as it will possibly make working out your funding entitlement easier as the funding will match up with the local authority school terms. However you do not have to.
Does funding cover school inset days?
School terms including inset days are 39 weeks. Funding only covers 38 weeks so, no, funding does not technically cover inset days. (Don’t get caught out and end up giving away your time and work for free like I did the first year I did funding!)
Tip: To ensure you allocate the right number of funded hours to your families make a not at the beginning of each term about how many hours of funding they are claiming with you that term. Then work out how many hours they have used each month (included hours when the child did not come due to sickness/child’s holidays, etc) and deduct it from the terms total. You can share this information with parents on invoices so that everyone is clear how many hours funding have been used.
How many hours a day can parents claim funding for?
You can offer funded places of up to 10 hours a day.
What are the universal and extended entitlements?
If you see these terms this is what they refer to:
Universal: This is the 15 hours that every child aged 3 and above can claim.
Extended: This is the additional 15 hours that eligible parents can claim to make their funded hours up to 30 hours.
Different councils may use different terms!
I share care with a nursery so who gets the funding?
The parents can decide. If the nurseries fees are more than yours they will probably want to choose the nursery but it is their decision. You can also share funding with another setting but be very careful to make sure they are not claiming more hours than they are telling you or you may end up being accused of overclaiming and may have to pay money back. (Unfair as that is!)
The child I care for lives in a different authority area to me. Where do I claim the funding?
You should apply for funding via your council as normal.
Can I claim funding if I am caring for a family member?
In a word, no. (And yes I know this is very unfair.) The can use Tax Free Childcare to pay you though.
Can I still provide Tax Free Childcare?
Yes – parents can still use this to pay for any hours they use on top of funded hours. If you are not registered to provide this it is well worth doing and it will cost you nothing.
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